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Laguna Travel Guide - "Probe P18.7-billion midnight deal on Laguna de Bay"

"Probe P18.7-billion midnight deal on Laguna de Bay"

By Paolo Romero (The Philippine Star) Updated July 10, 2010 12:00 AM

MANILA,Philippines - An administration lawmaker said President Aquino should immediately investigate an alleged “midnight deal” of the Arroyo administration involving a P18.7-billion contract for a project to rehabilitate Laguna de Bay.

Laguna Rep. Dan Fernandez called on Malacañang to look into the surreptitious awarding of the project aimed at improving the ecological and environmental quality of Laguna de Bay, by officials of the Department of Environment and Natural Resources (DENR) to a Belgian firm, Baggerwerken Decloedt En Zoon (BDC), in the last months of the Arroyo administration.

He said there was no competitive bidding conducted by the DENR for the multibillion-peso contract.

“There were never any consultations with the various stakeholders of Laguna de Bay, most especially the local government units concerned. There should be an investigation on this,” he said.

He said legal experts earlier called on the Aquino administration to conduct a review of the DENR-BDC agreement for the implementation of the Laguna de Bay rehabilitation project, saying this will be a litmus test for Mr. Aquino’s anti-corruption campaign.

Lawyer Enrique de la Cruz of the Ponce Enrile Reyes and Manalastas Law Offices said the contract was awarded to the BDC sometime in March-April this year by then acting Secretary Eleazar Quinto, who had a short three-week stint as DENR head.

Thereafter, the P18.7-billion loan agreement was signed by the Department of Finance (DOF) on April 30.

Despite repeated requests by the law firm, the DOF and the DENR refused to release copies of the signed supply contract and loan agreement, Fernandez said.

In a letter dated June 14, DENR Undersecretary Demetrio Ignacio said the agency could not release documents or consider offers relative to the project because the agency was still “coordinating and consolidating the opinions and/or awaiting additional input from concerned agencies.”

Ignacio said these agencies included the DOJ, DOF, the Government Procurement and Policy Board under the Department of Budget and Management, and the Office of the President.

The huge loan was taken from Fortis Bank of Belgium, purportedly as part of an executive agreement with a foreign government, he said.

But Fernandez said inquiries with the Belgian embassy showed that Belgium did not enter into an executive agreement with the Arroyo administration in connection with the project.

In a letter dated July 9, the Belgian embassy said its government has not granted any support or concessional funding to the Philippines or any government loan for the Laguna de Bay dredging and sanitation project.

“The Belgian government’s position proved to be a complete rejection of a legal opinion issued by then Justice Secretary Alberto Agra that the project is not covered by the bidding rules of Republic Act 9184 or the Government Procurement Act,” Fernandez said.

Fernandez said a check made by De la Cruz showed it was the Belgium-based Fortis Bank, a private firm, that was the party to the commercial loan agreement that would finance the project.

“There is, therefore, no government-to-government agreement that would fall within the purview of the exception to public bidding under RA 9184. In any case, even foreign-funded projects of the government are not exempt from public bidding despite executive agreements entered into by the Philippines with creditor countries or lending institutions,” De la Cruz said in his letter to Fernandez.

He also said the agreement between the DENR and BDC is not an “executive agreement but only a supply agreement,” thus the project requires public bidding.

“The DENR and the other government agencies, in all our inquiries, would not confirm any details on the loan agreement or the project itself. Was there a deliberate effort to conceal the details of this project? Is this another midnight deal? Is this another ZTE deal?” he said.

The Laguna de Bay rehabilitation project aims to improve the ecological and environmental quality of Laguna Lake, in order to restore its life support system and provide impetus to drive socio-economic development of the Laguna Lake region, Fernandez said.

The project includes, among others, the dredging of the navigational lane and the entire eight-kilometer Napindan Channel, he said.

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